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Panama PapersThe biggest financial leak in history

Introduction The Panama Papers is the largest financial data leak in historyIt covers nearly 40 years, from the late 1970s through the end of 2015214,488 offshore accounts revealed across 200+ countriesThe leaked documents illustrate how wealthy individuals and public officials are able to keep personal financial information privateThey were created by a corporate serviceprovider in Panama, Mossack Fonseca

About Mossack Fonseca

A Panamanian law firm known for helping clients set up offshore accounts Helps clients move money into offshore shell companies Their clients include criminals and members of various Mafia groups, in addition to government officials

VictimsPoliticians and their relatives and associatesRussias president, Vladimir Putins relatives and associatesPakistans prime minister, Nawaz Sharif and his family membersBrother-in-law of China's President Xi JinpingPresident of Ukraine, Petro PoroshenkoSon of Egypts former president, Alaa MubarakPrime minister of Iceland, Sigmundur Dav GunnlaugssonFather of Former British Prime Minister David Cameron

VictimsSports PersonalitiesFormer members of FIFAExecutives of football teams like FC Barcelona, Real MadridFootball players like Lionel Messi, Andy ColeOther sports personalities like Tiger Woods

VictimsEntertainment PersonalitiesAmitabh BachchanAishwarya Rai BachchanSarah FergusonJackie ChanEmma WatsonSimon Cowell

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Impact on VictimsPolitical BacklashBritish Prime Minister, David Cameron was dealing with allegations of improprietyPakistans prime minister, Nawaz Sharif is receiving backlash from the opposition Prime Minister of Iceland, Sigmundur Dav Gunnlaugsson resigned from his position

LawsuitsMessi and his father were convicted of tax fraud given a suspended 21-month prison sentence each and ordered to pay a collective fine of 3.1m

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Impact on Victims cont..Legal investigationsSeveral countries like France, Netherland opened investigationsSri Lanka sets up panel to investigate 'Panama PapersImprisonment Countries like Uruguay, Azerbaijan, Brazil have arrested and imprisoned peopleBad press

Responsible Parties and Their RolesThe anonymous whistle-blowerProvided the leaked documents

German newspaper Sueddeutsche ZeitungFirst outlet to publish about the leak

International Consortium of Investigative Journalists (ICIJ)Analysed the leaked documents and published

Responsible Parties and Their Roles cont..Mossack FonsecaOwners of the documentsIllegalshell corporations

CIA Conspiracy According to UBS Whistleblower and Russias president, Vladimir Putin

Legal Perspectives Mossack Fonseca & CoThe firm was founded byGerman lawyerJrgen Mossackin 1977 and joined by Panamanian novelist/lawyerRamn Fonseca in 1986It specializes in commercial law, trust services, investor advisory, and international business structuresCivil law with influences fromSpanish legal traditionandRoman law

The firm has nine offices inChina,[3]several inLatin America,[14]others in theUnited States[7]andEurope, with two inSwitzerland.In fev 2015 the firm is to be involved in a crime.some several features of anglo-american law also in panamanian law.

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Legal Perspectives Contd. Anglo-American law have also been accepted in Panamahabeas corpusJudicial precedentIt provides intellectual property protection andmaritime law servicesIn February 2015, the firm was implicated in the German government's investigation ofmoney launderingandtax evasionschemes atCommerzbank

The firm has nine offices inChina,[3]several inLatin America,[14]others in theUnited States[7]andEurope, with two inSwitzerland.In fev 2015 the firm is to be involved in a crime.some several features of anglo-american law also in panamanian law.

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Is Having an Offshore Account Illegal?

No Having an offshore company can be seen as a logical business decision Accounts are often used for tax evasion, money laundering, and corruption

Is Tax Evasion Legal?

No, Tax evasion is illegal One definition ofevasion isexploiting a tax advantage that Parliament never intended.

the Panama Papers the most extensive leak of financial documents ever. Tax evasionis the illegal evasion oftaxesby individuals,corporations, andtrusts..It is where you deliberately break the rules and deceive the taxman about what your tax bill should be.Examples of tax evasion you r, not declaring your full income or hiding taxable assets. If you are caught evading tax, you could be sent to prison for up to 10 years in the U.K.

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What does Mossack Fonseca say?

Our firm has never been accused or charged in connection with criminal wrongdoing. If we detect suspicious activity or misconduct, we are quick to report it to the authorities.

Mossack Fonseca argues that it does not help their clients commit crimes or bypass sanctions rather it provides them with privacy.

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Ethical PerspectivesEthical analyze under for category Parking profits offshore : - shifting or parking the profits in a foreign country Tax evasion:- Not paying tax Bribery:- give any value or render any service in exchange for the payment Whistle blowers:- who leaked the information to Sddeutsche Zeitung, a German newspaper

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Parking Profits Offshore Is Ethical?Unethical Patriotism is the last refuge of a scoundrel

Ethical High amount of unfair taxes Skimming a portion of the corporations profits

Is Tax evasion Ethical?Ethical Unfair tax rate for rich Keep assets in the more productive private sector rather than shifting those assets into the less productive public (government) sector Evil or corrupt or engages in unjust wars Significant portion of the money collected winds up in the pockets of corrupt politicians If the government discriminates against me because of my religion, race or ethnic background. Depend on religious literatures

Is Tax evasion Ethical Contd. Church of Jesus Christ Strongest against tax evasion Tax evasion only in cases where the government persecutes members of the Bahai faithJewish ReligiousTax evasion in general but does provide justification in some cases There is no moral duty to pay taxes where a king forces himself onto a country if the people do not accept him. There is no duty to pay taxes where the leadership or government is not legitimate .Evasion is not justifiable, tax evasion is regarded as theft

Is Tax evasion Ethical Contd. Muslim Religious Views The moral duty to provide for the poor, but they did not address the ethics of tax evasion directly. There is no duty to pay customs duties, restrictive tariffs, court fees, revenue stamps, or any tax on income. They suggest that the state should levy a proportional tax along the lines of Zakat on accumulated wealth. also against indirect taxation, since they believed all taxes should be direct

Is Tax Evasion Ethical Contd. Christian Literature Somewhat of a duty to pay just taxes and somewhat less of a duty to pay unjust taxesPayment may be forgiven where there is no ability to pay. It might be acceptable to evade taxes imposed on the necessities of life in certain situations

Whistle Blowers Is Ethical?Un Ethical Cause several resignation Violation of their property rights -someone is hiding assets from some government does not automatically means they are acting unethically. In some cases they are merely protecting their property from greedy or evil governmentsEthical Bribery is come out Not all tax evasion is unethical, as has been pointed out elsewhere

Behavior of players in panama papers based on ethical theories RelativismUtilitarianismDeontology

morality is relative to the norms of one's culture. That is, whether an action is right or wrong depends on the moral norms of the society in which it is practiced. The same action may be morally right in one society but be morally wrong in another.

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choice that yields the greatest benefit to the most people is the choice that is ethically correct. -Act utilitarianism -person performs the acts that benefit the most people, regardless of personal feelings or the societal constraints such as laws-Rule utilitarianism -takes into account the law and is concerned with fairness..concerned with what people do, not with the consequences of their actions.Do the right thing.Do it because it's the right thing to do.Don't do wrong things.

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Relativism TheoryJewish religious - Tax evasion is regarded as theft Muslim religious views Theres no duty to pay any tax on income If government is evil or wrong doing Tax evasion is ethicalUnder the Act utilitarianism ,whistleblowers perform in an ethical wayUnder Deontology and Utilitarianism theory tax evasion can be considered as unethical

those are the money that the government could have used in improving healthcare, education or infrastructureJewish -tax evasion is regarded as theft

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Ethics of whistleblowersThe whistleblower who leaked the information to Sddeutsche Zeitung, a German newspaper, called himself John Doe to maintain anonymitylot of people think that whistleblowers perform a valuable function because they expose corruptionThose who place their peoples property in jeopardy by revealing the existence and location os their assets and offshore accounts are assisting in the violation of their property rightsPanama papers that whoever leaked those millions of documents did it in violation of confidentiality

- John doe leaked the information because of his strong distaste for income inequality and because of his view that there were many injustices being perpetrated by some of the entities and individuals who were availing themselves of the entitiesjust because someone is hiding assets from some government does not automatically means they are acting unethically. In some cases they are merely protecting their property from greedy or evil governments

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Professional Lapses Mossack Fonseca as a professional law firmLegal but unethical business functionDue to lack of data security damaged the trust of their clientsClients of Mossack FonsecaIllegal acts e.g. tax evasions, flow of black moneyUnethical avoid the responsibility towards society, act against their professional conductsJohn Doe, the information leakerInformation is obtained by illegally hacking German newspaper Sddeutsche Zeitung (SZ) and International Consortium of Investigative Journalists (ICIJ)is leaktivism ethical and legal

After the panama papers leak the first thing asked by people is whether the business functions of Mossack Fonseca are legal According to the executives of law firm their operations are legal The use of offshore business entities are not illegal where they are registered and providing such services also legally accepted in Panama But they are not ethical They knew about the tax evasions and handing of black money done by many of their clients and still they provided a place and opportunities for those financial misconductsLaw firm was a trusted firm among their clientele as we can see their clients include many reputed peoplethey failed in keeping the trust their clients put on them as a secure company for their business dealsAccording to data experts Mossack Fonseca had been implementing a vulnerable e-mail server with outdated software versions This professional lapse on their side caused this information leak and brought great disturbances to their clients

Many clients of Mossack Fonseca have done illegal acts like tax evasions and other illegal activities to earn money which they have hide using Mossack Fonseca they are currently going through legal confrontations from respective countriesAlso their acts are unethical and against their professional conduct as responsible people

This information are obtained by illegally hacking. Hacking information systems without an authorization is an illegal but in this case the hackers have a good intention which is revealing the financial misconducts done by famous and infamous figures around the worldBut the way this information were obtained is illegal and unethical whether the informant is a concerned whistleblower from inside the company or an external IT professional

A German news paper and the International Consortium of Investigative Journalists are the entities who analyzed and published the leak information from Mossack FonsecaPaved the way for a new era of journalism called leaktivism - is the act of releasing confidential information to the world at large as an effective form of social protestpanama papers is certainly a good turning point in protest against economic inequalities. But is this kind of journalism professional or ethical and legal. In this panama papers incident it doesnt create a big negative impact for the society.may lead to creating even national security threats for countries as well, depending on their information source.28

Professional BodiesLegal Netlink AllianceThe Municipality of Regulation and Supervision of Financial Subjects in PanamaTax Authority for Latin AmericaInternational Consortium of Investigative Journalists (ICIJ)

Legal Netlink Allianceis a global alliance of carefully selected, midsized, general practice, independent law firms

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Code of Conduct Law Firm Know Your ClientCollection and analysis of basic identity informationName matching against lists of known parties such as "politically exposed personDetermination of the customer's risk in terms of propensity to commit money laundering, terrorist finance, or identity theftMonitoring of a customer's transactions against expected behaviour and recorded profile as well as that of the customer's peers

Know your customer(KYC) is the process of a business verifying the identity of its clients. preventidentity theft, financial fraud,money launderingandterrorist financing.

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Code of Conducts - JournalistsStrict set of principles about how the information was to be handledJournalists from the Sueddeutsche Zeitung had access to the data for over a yearNature of the information could potentially put the journalists at risk for retribution; only a simultaneous release could protect themEven now, asked to release the raw data, but rejects; to protect source

Where Mossack Fonsecas code failed them, the journalists did not

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PracticesTax Authority for Latin America: different countries have differing tax codes and charge different rates, foreign individuals and companies are taxed at very low, or even non-existent, ratesThe Municipality of Regulation and Supervision of Financial Subjects in PanamaPanama doesnt ask offshore companies to pay income tax on international transactions, sales tax, and other feesonly an annual franchise tax of $300 to the government

Actions taken by the Professional bodies after the scandalProcuradura de la Nacin Nacin (General procuraduria of the nation) announced that it would investigate Mossack Fonseca and the Panama papersProsecutor against Organized Crime -Raided Mossack FonsecaThe Attorney General's office issued a press release about the raidThe Municipality of Regulation and Supervision of Financial Subjects initiated a special review of the law firm Mossack Fonseca

Monitoring compliance with the Constitution and the law , promote the protection of fundamental rights , respect for citizens duties and protect public property , with benchmark efficiency2)Also an operation of the newly formed Second Specialized .supported by the Panamanian police..searched their Bella Vista offices.4) which lasted 27 hours,stating that the purpose was "to obtain documents relevant to the information published in news articles that establishes the possible use of the law firm in illegal activities.5)to determine whether or not tax law stipulations were fulfilled.

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How could have they avoided it

Mossack Fonseca use of proper security measuresStrength the code of conduct called Know Your Customer Clients of Mossack Fonseca avoid performing financial misconductsTax authorities and governments better legal system for avoid financial misconducts, Followed the globally standard tax code Publish professional journals and magazines

1)Even though most of the Professional bodies involved on the scandal, they could have taken some precautions to avoid this kind of scandals in different aspects From company side this information leak could have been avoided if company implemented proper security measurements. Their email server was vulneable to threats.2) in descriptive way. By issuing proper Code of Conduct is another way of avoid from illegal activities. 4)This case study mentioned that the Tax Authority does not have a unified tax codes for Latin American countries, including Panama. for all countries instead having low tax codes for the Panama, they might have ability to avoid the situation.

5)Most of the people involved in this kind of illegal things mainly because of the unawareness to educate the people about this kind of offshore companies might have avoid from illegal activities.

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